Piyush Jain, a 22-year-old retail investor from Aligarh may be new to the ways of the stock market but on Wednesday, when the Bombay Stock Exchange’s benchmark 30-stock index fell by 1,500 points shortly before opening, and then recovered significantly to close only 336 points below the level it closed at on Tuesday, his behaviour was straight from the book.
He did not panic.
“Given the strong economic growth of India every fall in the stock market is a good buying opportunity,” said Jain. “I am confident about long-term growth story of India. Therefore, when markets fell sharply in the morning I bought shares worth Rs80,000.”
The markets fell in response to an announcement by stock market regulator Sebi relating to curbs on certain routes and tools used by foreign funds that invest in Indian equities. In response, BSE’s Sensex opened 7.9% down on Wednesday morning but recovered soon after—the recovery was helped by statements from Sebi and the finance minister. An executive at a brokerage said that some people used the opportunity to buy selectively.
“After the correction, the markets saw buying in momentum stocks. People showed buying interest in large cap stocks of companies in the capital goods and power sectors,” said Shrikant Shetty, vice-president, Anand Rathi Securities Ltd, a Mumbai-based brokerage house.
“I have been following the stock market closely for the last four years and have seen many ups and downs,” said Indira Kumari, a New-Delhi home maker.
“I have learnt that you should not be over-exposed to the futures market of National stock Exchange (NSE). I, therefore, always hedge my positions in the options market before investing in the futures market,” said Kumari.
“I made a loss of Rs10,000 last week in the futures market,” said Mukesh Thukral, 31, New-Delhi based chartered accountant.
“Since then I have decided to stay out of the futures market. I only want to do some long-term investments.”
The derivatives or futures and options market largely sees investments from institutional investors.
“Having seen choppiness in the stock market for past so many years, I wasn’t moved by the Sebi’s move,” said Bakkiya Rathi a Coimbatore-based investor. “I just sat quietly and didn’t tamper with any of my my investments. I want to stay invested for long-term.”